Main points of investment
Steady growth in performance, basically in line with expectations. In the first three quarters of 2023, the company achieved operating income of 2.507 billion yuan, an increase of 10.09% over the same period last year; net profit of 466 million yuan, an increase of 15.01%; net profit of 442 million yuan, an increase of 20.19% over the same period last year; and net operating cash flow of 865 million yuan, an increase of 3.61% over the same period last year. Of this total, Q3 achieved an operating income of 806 million yuan in a single quarter, an increase of 4.10% over the same period last year, a net profit of 149 million yuan, an increase of 10.66%, and a net profit of 141 million yuan, an increase of 9.27% over the same period last year. The company adheres to the "1x N" brand strategy, antelope main brand empowerment, improve brand influence, paste growth is good, product pipeline is rich, performance to achieve steady growth.
The growth of superior products is good, and the promotion of new varieties is accelerated. The company uses superior brands and channels to achieve rapid development, providing a new driving force for the company's performance growth. In the first three quarters, patch products are expected to maintain a growth rate of about 10%, of which the exclusive product Tongluo Qutong Ointment has a complete promotion system and a mature market strategy, with an estimated growth rate of 10%, 15%, and capsules at about 10%. Tablets are expected to grow at about 20%. The company will speed up the listing of new products, during the reporting period, montmorillonite powder obtained the drug registration certificate, the products are mainly used for adults and children with acute and chronic diarrhea, the company vigorously expand respiratory, paediatrics and other new business.
The profitability has improved steadily and the cost has been well controlled. In the first three quarters of 2023, the company's sales gross profit margin was 74.63%, up 1.39pct from the same period last year; the net sales profit margin was 18.60%, up 0.79pct from the same period last year; of which Q3 single-quarter sales gross profit margin was 73.17%, down 1.27pct from the same period last year; and the net sales margin was 18.50%, up 1.10pctscape Q3 single-quarter gross profit margin slightly declined. In the first three quarters of 2023, the company's sales expense rate, management expense rate, financial expense rate and R & D expense rate were 45.83%, 5.06%,-0.98% and 2.65%, respectively, compared with the same period last year-2.11pct,-0.43pct,-0.24pct,-0.34pct.
The company's management efficiency and cost control level have been further improved, and the overall expense rate has decreased slightly.
Investment suggestion: we expect the company's revenue from 2023 to 2025 to be 34.67pm 39.97 / 4.646 billion yuan, the net profit from its parent to be 5.42pm 6.43 / 763 million, the corresponding EPS to be 0.96pm 1.13x1.35, and the corresponding PE to be 16.5pm 14.0pm 11.8 times, maintaining the "buy" rating.
Risk tips: product price reduction risk; traditional Chinese medicine price rise risk; product sales risk is not as expected.